The grievance, filed on Tuesday in US Bankruptcy Court in Delaware, describes Daniel Friedberg, a former chief compliance officer at FTX and normal counsel of its associated crypto hedge fund Alameda Research, as a “fixer” for Bankman-Fried and different FTX executives who enabled the “wholesale raiding” of buyer funds.
Friedberg “whitewashed” complaints from staff elevating considerations concerning the actions of FTX and Alameda by settling claims for “inflated” quantities and in some circumstances hiring regulation corporations that represented whistleblowers to carry out authorized work for FTX, the corporate stated.
The settlement quantities are redacted within the grievance.
A lawyer for Friedberg and a spokesperson for FTX didn’t instantly reply to requests for remark.
The lawsuit accuses Friedberg of authorized malpractice and breaching his fiduciary responsibility. It seeks to claw again “tens of millions” value of cryptocurrency Friedberg acquired whereas working for FTX, alongside along with his compensation and $3 million in bonuses.
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FTX filed for chapter in November 2022 after a run on buyer deposits. The firm’s new management has accused Bankman-Fried and his associates of widespread failures to implement company controls. Bankman-Fried has been criminally charged in federal court docket in Manhattan with stealing billions in FTX buyer funds to plug holes on the Alameda hedge fund and fund speculative investments. Bankman-Fried has pleaded not responsible and denied stealing funds.
At least three different FTX executives have pleaded responsible to US fees.
Friedberg has cooperated with US investigations into the FTX collapse, Reuters has reported.
Friedberg served as an adviser to Bankman-Fried and his firms whereas working at regulation agency Fenwick & West. He grew to become an in-house lawyer at each FTX and Alameda in 2020.
Source: economictimes.indiatimes.com